With faster data speed, OTT and short video consumption will see a jump; traditional advertising will further shift towards digital, assert experts
Reliance will start rolling out the ‘world’s largest standalone’ 5G services for its subscribers in metro cities (Delhi, Mumbai, Kolkata and Chennai) by Diwali, Chairman Mukesh Ambani announced at RIL’s 45th AGM on Monday.
He also announced the commitment to infuse Rs 2 lakh crore to deliver 5G to “every town, to every taluka, and every tehsil of our country” through JioAirFibre (wi-fi) by December 2023. The development could give the company an edge over other networks.
Reliance Jio has partnered with Qualcomm to develop 5G solutions for India. The company also announced its partnerships with Meta (for immersive technology and metaverse), Google (5G smartphones and Google cloud capabilities), Microsoft-cloud-enabled business application and Intel (cloud-scale data centres and cutting-edge applications).
So, what does this hold for the advertising sector?
The advertising world is ecstatic over the announcement. After all, 5G is expected to offer data speed from 1Gbps to 10Gbps with 1 milli-second latency that will increase video consumption in the country further, starting with the metros first, experts say.
Sandeep Goyal, MD of Rediffusion, says, “5G will bring cataclysmic change in the media and advertising sector. New experiences. Higher usage. New opportunities and apertures. Faster internet with quicker downloads will give impetus to more video consumption. The game is all set to change – for the better.”
Videos, short or long-form, are progressively becoming a significant part of every brand’s content marketing strategy. India’s digital video audience universe stands at 400 million, as per reports. Dubbing has also fuelled the growth of English, regional and other foreign language content.
At present, only 1/3 of this zone are paying subscribers, while the remaining are AVoD (advertising video-on-demand) audiences, says Ormax. Overall consumption of digital content grew exponentially during the pandemic and 5G is expected to add more subscribers for OTT and connected TV.
5G will also accelerate digital advertising, says Syed Ahmed Aftab Naqvi, Global CEO & Co-founder, Gozoop group and General Partner & Co-founder Trillium Venture Capital.
“5G will exponentially boost data processing capabilities which will accelerate targeting and segmentation. Moreover, it will allow richer videos to get integrated which will boost customer experiences,” Naqvi explains.
“Advertisers are there where consumers are. More video consumption means more advertising on digital platforms. The traditional ad spends will further shift to digital advertising,” says Rahul Vengalil, CEO of Everest.
Globally, 66 per cent of ad spends is going into digital advertising. In India, digital is set to overtake TV this year and is likely to acquire 50 per cent share in the total ad spend in the next three years. By that time, India’s total ad spend is likely to cross Rs 1 lakh crore, which means digital will get Rs 50,000 crore.
“With the entry of 5G, digital’s share in India’s AdEx is set to increase further as more people will watch content on connected devices,” experts point out.
According to Vengalil, 5G will democratise the video consumption space as people’s dependence on cable and dish TV will reduce. It will also democratise the AR/VR as more and more brands will be able to use it now. Since the amount of data processing will reduce substantially.
With the number of connected devices are rising, 5G will allow IoT devices to communicate and share data faster than ever.
“Advertisers will have to relook at the content consumption pattern to come up with a media plan. Tools are already available. Whoever uses it first, will be at advantage,” Vengalil said.
Smart TV penetration to go up
India’s smart TV penetration remains to be low at 10-15%, however, this is growing at a rapid pace (over 30% YoY growth) and may move towards penetration levels of 25-30% over the next three years, experts say.
Karan Taurani, Senior Vice President, Elara Capital says, “The launch of Jio AirFiber will boost in-home internet speeds, which in turn will lead to a rapid shift of users from traditional TV to smart TVs in the metro cities. In fact, if the prices are attractive (on par with wireless broadband or small premium), tier 2 and 3 towns may even jump and move directly towards the smart TV technology. This will improve digital content consumption growth (advertising and subscription led), which may further lead to a negative impact for the TV industry as a whole.”
by Kanchan Srivastava
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